Believe it or not, trading in your car can be a fairly painless process. In fact, many people choose to trade in their vehicle just to avoid the hassle of selling their car or truck themselves.
Although it’s much easier to just hand your car over to a dealer and let him or her do all the work for you, it is important for you to have some understanding of the process. If you understand the way trading in works you’ll have a better experience, and you might even get yourself a better offer.
Here are 5 key things you should understand before you trade in your car.
#5 - Research Your Vehicle’s Value
The most important thing to do before you go into the dealership is to research your vehicle’s value. There are several things you can do to get a general idea about what your car is worth.
First, check the book value. Remember that book value is not an exact value, it’s an estimated range. Book value won’t tell you your vehicle’s value exactly, but it will tell you the general range your car will fall within.
Next, check local market values. Keep in mind that the prices you see advertised online are retail prices, but the offer you receive from the dealer will essentially be a wholesale offer. After trading for your car, the dealer will incur several expenses, so it’s important to understand that your trade-in offer will not be as high as the retail prices you see.
Regardless, you should search online for similar vehicles in your area and see what they’re selling for. Take note if there are very many, or very few, vehicles like yours for sale - the law of supply and demand may have an impact on your vehicle’s value.
The best thing you can do is to get your car appraised, and there is some great news here. While getting a professional appraisal used to be a time-consuming and expensive process, you can now get an appraisal online for free in just a few minutes!
#4 - Take the Silence Out of the “Silent Walkaround”
Car dealers evaluate cars all day, every day. It’s their job. Over time, they get pretty good at identifying every little scratch in your paint and every little pin prick in your upholstery.
When you trade in your car, dealers sometimes put this skill on display in what’s known as a silent walkaround. The dealer slowly walks around your car, taking note of every tiny imperfection they find.
The walkaround is actually a necessary step in the trade-in process, because it’s important for the dealer to know how much it will cost to get the vehicle ready for resale. But there’s no reason it needs to be silent.
Open up a dialogue and ask questions while the dealer is evaluating your vehicle’s value. Demonstrate that you have a good understanding of your vehicle’s condition, and the costs of repairing all those minor imperfections.
Breaking through the silence of the silent walkaround changes the dynamic for both parties and gives you an opportunity to show that you’ve done your homework.
#3 - Understanding the Dealer’s Perspective
It’s possible to do all the right research about your car and still not understand your trade-in value if you don’t take some time to understand the dealer’s perspective.
The biggest thing here is that the dealer needs to cover their costs. Getting a car ready for sale can be an expensive process - and that’s exactly what the dealer will need to do after they take your trade-in.
If your car is in bad shape, they will have to invest in getting it cleaned, tuned up, and replacing damaged parts.
Think about the condition you would want a used car to be in when you're looking to buy. Even if the car isn't new, it's "new to you," and you want it to be as close to new as possible. You want to see shiny wheels and stainless seats - and the dealer invests money to make those things happen.
But even if your car is already in “like new” condition, the dealer will still have plenty of overhead. They’ll have administrative costs related to transferring the title and registration, and they’ll have selling costs like advertising and/or auction fees. You can learn more about the factors that impact trade-in value here.
#2 - Break Out the White Gloves Before You Trade In Your Car
Here at The Appraisal Lane, we see thousands of cars every month. From the hottest whips to the saddest hoopties, we’ve seen it all. Whichever end of the spectrum your ride falls in, it always pays to clean things up before you try to trade in your car.
If you have so much trash in the back seat that your car is a rolling fire hazard, don’t expect top dollar for your trade-in. The dealer will factor in additional costs for cleaning up your car, and they might assume that you’ve neglected your routine maintenance as well.
If your seats are covered in so much dog hair that you can’t see the original color of the upholstery, you’re going to take a ding for that too. Cleaning up after pets can be hard work and if you don’t do it yourself, the dealer will have to pay someone else to do it.
Bring your car in clean. It might mean you need to spend a few hours scrubbing, but it’s probably a wise use of your time if it increases your vehicle’s value.
#1 - Check Your State’s Trade-In Tax Laws
Out of the 50 states in the US, 44 of them offer a sales tax credit when you trade in your car. Find out what your state offers, and do the math to figure out how much you can save in taxes by trading in.
In some cases, your trade-in can save you hundreds or thousands of dollars on your new car purchase. That savings might mean that you can roll off the lot in style with an extra upgrade or two on your new car.
If you want to find out exactly how much your trade-in is worth, consider giving The Appraisal Lane a try. We’ve got a whole team of professional appraisers standing by. In 30 minutes or less, we’ll give you a guaranteed offer you can redeem for cash or trade at a participating dealership near you.